You are engaged in the audit of Bryan Company, a new client, at the end of its first fiscal year, June 30, 2019. During your work on inventories, you see that all of the merchandise on the balance sheet at year end had been obtained on the first day of the business on July 31,2018. It was aquired from Andrew Bryan, the sole shareholder and president of Bryan Company, in return for of a $100,000 note payable to Andrew due July 1, 2022, with interest at 15 percent. (The merchandise had been used in his last business that he operated as a sole proprietor.)

a. Explain two procedures that you might include in your audit of the Bryan Company to check that the inventory exists and that the value is correct.

b. What other concerns or questions do you have about the $100,000 inventory?